Road Map and Investment Financing Prospectus Peter Hoogland, November

PRESENTATION OUTLINE 2  What is the Road Map and Prospectus?  Why is it important?  What are the components of the Road Map and Prospectus?  What is our approach and process for its development?

What is the Road Map and Prospectus? 3 The Government’s vision, development priorities and target outcomes for achieving universal access by 2030  Universal access to electricity by 2030  Clear targets, intermediate goals and milestones to measure progress  Integrated, sector-wide approach (grid and off-grid)  Clear targets, intermediate goals and milestones to measure progress  Integrated, sector-wide approach (grid and off-grid) Goal Path

It’s all about realization… Why is it important? 4 Vision Actions Road Map and Prospectus Sector wide least cost plan Institutional Framework Universal Access by 2030 Many Players One Team One Plan Sustainable Financing Package

1.Government’s goal and targets What is the content of the Road Map and Prospectus? 5 What infrastructure needs to built to connect all customers at the least cost?  Technology options for grid extension and off grid  Locations and number of households requiring connections  Least-cost priority order for new connections  Total costs (investment and recurrent) This is the work being done by the Columbia University team 2.Geospatial rollout plan for the distribution network

3.Required institutional framework What is the content of the Road Map and Prospectus? 6 These last two tasks are being carried out by the Castalia team It defines  Roles  Responsibilities  Accountabilities … …delivering the right  Policies  Regulations  Implementation arrangements  Business models for service provision We will discuss this further this afternoon 4.A sustainable financing platform and a bankable prospectus

5.Technical assistance and capacity building plan to ensure successful implementation of the program: ­Delivering the program is a step change in capacity over current connection rates 6.A results monitoring plan to track, measure and update the program ­How are we tracking against the targets? ­What lessons are we learning? ­How do we update the program? What is the content of the Road Map and Prospectus? 7

What is the Investment Prospectus? 8 4. Syndication of financing – grants, loans, government budget, equity, and technical assistance 1. Projects – from rollout for 2015 to Financing gap – how to cover the gap between costs and revenues 2. Investment funding requirements for each year of the rollout program and the potential sources of funds?

The funding for the capital investment and the required technical assistance will be large. Potential sources are: Funding requirements 9 This funding will be determined in consultation with stakeholders  Utilities  Government  Private sector  Donors

The financing gap 10 Revenues include connection costs and tariff income Costs include recurrent costs and any cost of capital Significant increases in electric access have not been achieved without some Government support to bridge the financing gap

The options for bridging the financing gap are: Bridging the financing gap 11  Government budget funds  Donor grants and concessional loans  Cross-subsidies within the sector  Cross-subsidies from outside the sector

Government financial support 12 Commercial Viability Service providers (public or private) must be viable for the rollout to be sustainable Commercial Viability Service providers (public or private) must be viable for the rollout to be sustainable Customer Affordability Electricity must be affordable to all for universal access to be achieved Customer Affordability Electricity must be affordable to all for universal access to be achieved The government must ensure both commercial viability and affordability for success…

Investment prospectus includes a sector wide approach Examples from other countries 13 Kenya Distribution investments are linked with generation and transmission

Examples from other countries 14 Rwanda Investment prospectus includes a sector wide approach Generation, transmission, and distribution costs are all part of the total investment plan

Our approach and process 15 Goal and targets Develop institutional framework Develop financing framework Develop funding requirements The Road Map and Prospectus is the Government’s plan. The Government heads a collaborative and evolving process Develop least-cost roll out plan

Summary 16 Two key messages, the Roadmap and Prospectus is more than a plan….  Integrated sector wide program—not just a list of individual projects  An action plan with enablers that ensure the realization of the vision of universal access Many Players One Team One Plan Many Players One Team One Plan

Wellington Level 2, 88 The Terrace PO Box Wellington New Zealand Sydney Young Street Sydney, NSW 2000 Australia Washington 1747 Pennsylvania Ave NW Suite 1200 Washington DC 20006, USA New York 200 Park Avenue Suite 1744 New York, NY 10166, USA Bogotá Carrera 7 No Torre 1, Oficina 1424 Bogotá Colombia Paris 7 Rue Claude Chahu Paris France Contact us Young Street SYDNEY 2000 Australia T: